Supercommittee Pits Lobbying Firms’ Clients Against One Another

Major defense contractors such as Boeing Co. and Lockheed Martin Corp. have a dozen or more lobbying firms working for them, many of whom also represent the health-care industry, another likely target of budget cuts. n Photographer: Stephen Morton/Bloomberg

Sept. 2 (Bloomberg) -- The bipartisan congressional
supercommittee charged with finding $1.5 trillion in budget
savings is leaving Washington lobbying firms in a quandary,
seeing their clients pitted against one another in a competition
for government cash.

Major defense contractors such as Boeing Co. and Lockheed
Martin Corp. have a dozen or more lobbying firms working for
them, many of whom also represent the health-care industry,
another likely target of budget cuts. While firms often deal
with conflicts of interest, the supercommittee represents an
unusual challenge, said Clyde Wilcox, a government professor at
Georgetown University in Washington.

“This actually is going to be much more like a zero sum
game,” Wilcox said. “If someone wins, someone loses.”

Trying to protect clients by stalling action -- a classic
lobbying tactic -- isn’t an option for most because the
committee’s failure to meet a Nov. 23 deadline would trigger
$1.2 trillion in across-the-board spending cuts in both defense
and non-defense spending beginning in 2013.

Lobbying firms will probably try “to finesse any conflicts
of interest” and go about business as usual, said Jeffrey
Berry, a political science professor who specializes in lobbying
at Tufts University in Medford, Massachusetts.

“What they do behind the scenes is not highly visible,”
Berry said. For instance, the firms wouldn’t run major
advertising campaigns that prompt a client to “say, hey, why
are you lobbying for them when you should be solely concerned
with our interest?’” Berry said.

Lobbyists’ Bottom Line

If all else fails, “I suspect that they’ll be rational
businesspersons and make a decision based on their long-term
financial interest,” Berry said. “They have a bottom line,
just like their clients.”

The 12-member panel, whose work has taken on greater
urgency since Standard & Poor’s downgraded the U.S. credit
rating in August, will be the central focus of political and
lobbying activity for the next few months.

Akin Gump Strauss Hauer & Feld LLP, which Washington’s
Center for Responsive Politics ranks as the second-largest
lobbying firm with 2011 revenue of $17.7 million, is among those
with competing client interests. The firm’s more than 100
clients include companies in insurance, energy, finance and
chemicals. The roster also includes Chicago-based Boeing and New
York-based Pfizer Inc., the world’s biggest drugmaker with
stakes in the future of Medicare, the government program for the
elderly.

Akin Gump

Akin Gump is also a law firm and as a result has a set
conflict of interest policy, said Joel Jankowsky, a senior
executive partner at the firm in Washington. Even so, some
clients may first look to their industry trade groups to take
their case to Congress rather than his lobbyists, he said.

“It’s largely a question of what they decide their
strategy is going to be and whether or not they want us to
engage on their behalf,” Jankowsky said.

Tony Podesta, whose Podesta Group ranks third among
lobbying firms with 2011 revenue of $13.7 million, said he will
do what he always does: advocate for all of his clients and try
to persuade panel members that their programs are meritorious.
Lobbyists won’t be in the position of suggesting cuts to rival
programs, he said.

“It doesn’t feel to me that this is going to be the
’Sophie’s Choice’ of lobbying,” Podesta said.

‘Affordable Medicines’

Boeing and Bethesda, Maryland-based Lockheed didn’t respond
to requests for comment on their lobbying of the supercommittee.
Lockheed “will continue to work with our customers throughout
the process to understand the potential impact to our
business,” spokesman Rob Fuller said in a statement.

Pfizer wouldn’t comment on its lobbying plans or potential
conflicts, though Chief Executive Officer Ian Read has said his
company will fight attempts to cut Medicare payments for
medicines. Spokesman Raul Damas said the company “will continue
raising awareness” about how the government prescription drug
benefit has provided “affordable medicines” for seniors.

The firms downplayed the potential for problems. Patton
Boggs LLP, which ranks at the top of the lobbying list with
$18.8 million in revenue this year and is also a law firm, has
“very formal and thorough mechanisms” for resolving conflicts
of interest, said Nicholas Allard, who runs the lobbying,
political and election law practice.

Persuasion of the supercommittee might be comparable to the
general lobbying always under way on behalf of a range of
clients or an omnibus spending bill, said Stewart Verdery,
partner and founder of Monument Policy Group. The firm’s clients
include Boeing, defense contractor General Dynamics Corp.,
drugmaker Eli Lilly & Co. and the Pharmaceutical Research and
Manufacturers of America, the trade group representing
drugmakers.

“It’s akin to working with congressional leadership, which
we -- as most firms -- do all the time,” Verdery said. “They
may have a role to play in pretty much everything of
importance.”